Currently my class is studying Austrian economic theory, which is often compared in popular economic dialogue to Keynesian theory. I was wondering, which school has made more accurate predictions, and had more accurate models, Austrian or Keynesian?
migration rejected from money.stackexchange.com Sep 18 at 2:47
This question came from our site for people who want to be financially literate. Votes, comments, and answers are locked due to the question being closed here, but it may be eligible for editing and reopening on the site where it originated.
closed as primarily opinion-based by FooBar, EnergyNumbers, cc7768, The Almighty Bob, Jamzy Sep 18 at 2:47
Many good questions generate some degree of opinion based on expert experience, but answers to this question will tend to be almost entirely based on opinions, rather than facts, references, or specific expertise.If this question can be reworded to fit the rules in the help center, please edit the question.
I still think that this question is still a bit too broad, but the revisions made by the OP were useful, and permit at least some indicative data to come in:
First, the "empirical usefulness" of Keynesian, neo-Keynesian, meta-Keynesian, post-Keynesian, post-meta-Keynesian, after-Keynesian, beyond-Keynesian, etc models and theory strands, is one of the "everyday issues" in Economics, and there can be no single verdict on the matter -let alone the fact that in the last decade things has started to blur and merge with yet other strands, towards a possible wider synthesis.
As regards the Austrian School of thought, what constitutes "empirical implementation" differs widely among the School's followers. For example, quoting from Steven Horwitz's "The Empirics of Austrian Economics" (2012)
Note the parenthetical comment "and a few have". The whole essay is I believe, worth reading, at least for informative purposes.
As an example of these "few" studies, one can download Robert Mulligan (2006) "An Empirical Examination of Austrian Business Cycle Theory", where one will find a paper with an econometric error-correction model, co-integration unit root and Granger-causality tests, etc.
But in all, I believe Horwitz describes the dominant approach in the Austrian School (i.e. "not-so-much-quantitative" empirics), which makes difficult to "quickly and easily" compare and assess their approach with any other approach in "mainstream economics".
'Beneficial' is a subjective term. So the answer depends on what you think an economic policy should do.
I tend to think more Austrian than Keynseian. But I am an American Libertarian at heart.
Keynes was British. As such when he talks about the government doing things what he was advocating was that the royal family should do those things. In America, the government is of the people, by the people, and for the people. We do not have the same class distinction that existed in England at the time of Keynes.
I hold that the Great Depression was made worse by the actions of the government. It was only WW2 that brought an end to the Depression. And it did so mostly by killing off so many people. With fewer people in the world, the existing wealth was more concentrated in those that survived.